Back to All ArticlesHow to Retire: Switching from Careful Saver to Happy Spender
- Retirement Planning
- Financial Planning
We often see pre-retirees ready to stop working, but not emotionally ready to start tapping into their savings — that's natural. The mental shift of switching from a careful saver to a happy spender can be significant, with 46% of retirees claiming it creates anxiety and takes an emotional toll. 1
- Regret: Extra resources later in life could have provided joy through spending, gifting to loved ones, or donating to causes in retirement.
- Missed Opportunities: Delaying spending may mean missing out on travel or physical activities if your health changes.
- Unconscious Drifting: Time can slip away unfulfilled if you don’t understand how money can support your happiness and purpose.
The transition is especially challenging for retirees in a down market, as they are concerned they may have to return to work or cut back dramatically. A solid financial and investment plan can help reduce these fears and build confidence.
Case Study: Overcoming the Shift from Saver to Spender in Retirement
The Challenge
An aggressive saver and highly conscious spender during his working years, our client struggled to become a spender in retirement despite a solid financial plan.
The Solution
We demonstrated how his savings will support his ideal retirement and how spending is part of the plan, not a risk:
- Focus on Joy, Not the Spend: We helped identify five specific goals tied to people, hobbies, and passions, and mapped out timelines and the funding needed for each. Reframing spending around meaning and purpose made it easier to accept.
- Plan by Age: We modeled his spending by age, illustrating higher expenses earlier in retirement and a "surplus" in his financial plan. We increased his daily and "big ticket" spending in ways that were meaningful to him, including a bucket list trip with close friends.
The Outcome
By forecasting hypothetical situations and addressing concerns, he shifted his mindset to one of accomplishment: he worked hard in his career, saved well, and with a solid plan in place earned the right to start his new chapter — spending with freedom and peace of mind.
How to Mentally and Emotionally Prepare for the Saver to Spender Switch
When clients struggle with the transition into retirement spending, we guide them through four key steps:
- Know Your Personal Financial Priorities: There is no right or wrong answer — they may differ from others and shift over time. We decide what's "okay to buy" and what’s "wasteful" but it’s not always about what’s least expensive. There may be a financially prudent answer but emotional value matters too. Start with these questions:
- What are your spending biases?
- Are they holding you back from enjoying your money?
- Define Your "Worry-Free" Number: Evaluating every purchase can take some joy out of living. Christine Benz, who wrote How to Retire,2
, discusses identifying your "worry-free" number.
- Determine what you can spend stress-free.
- Try it for a month and adjust if needed to help reduce money worries.
- Be Confident in Your Financial Plan: Refresh and refine your financial plan a year before retirement with spending assumptions that reflect your “early retirement budget.” 3
- What expenses will go away or drop once you stop working, such as parking, fuel, dry cleaning, etc.?
- What will increase initially, such as travel or entertainment?
- What changes are feasible? Knowing how much you can safely increase your annual spending provides helpful guardrails, so you can focus on the big picture, not every dollar.
- Visualize the Financial Transition. Your biweekly employer paycheck is now replaced by a new recurring monthly (or biweekly) “paycheck” from your investment accounts.
- Create a 12-month spending summary. This overview will help you minimize cash flow surprises and plan for months that may require extra cash, such as when paying for home insurance, property taxes, or an upcoming vacation.
We all have money mindsets shaped early in life. Finding the joy your money will afford you is not only freeing, but also well-deserved after decades of saving. If you are feeling nervous about retirement spending, we’re here to help. Contact us today.
DISCLOSURE: Quantum Financial Advisors, LLC is an SEC registered investment adviser. SEC registration does not constitute an endorsement of Quantum Financial Advisors, LLC by the SEC nor does it indicate that Quantum Financial Advisors, LLC has attained a particular level of skill or ability. This material prepared by Quantum Financial Advisors, LLC is for informational purposes only and is accurate as of the date it was prepared. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Advisory services are only offered to clients or prospective clients where Quantum Financial Advisors, LLC and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Quantum Financial Advisors, LLC unless a client service agreement is in place. This material is not intended to serve as personalized tax, legal, and/or investment advice since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Quantum Financial Advisors, LLC is not an accounting or legal firm. Please consult with your tax and/or legal professional regarding your specific tax and/or legal situation when determining if any of the mentioned strategies are right for you.
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- Retirement Planning
- Financial Planning
Wende Headley, CFP®, MBA, CDFA®
Wende Headley is the Chief Executive Officer of Quantum Financial Advisors, LLC. Wende is also a Financial Advisor directly to clients and a founding partner of the firm.
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